Homebuyers gaining purchasing power

Homebuyers have gained $22,250 in purchasing power since mortgage rates hit a five-month peak in April. That astonishing fact is from Redfin’s latest report. Here are the other major key points:
  • Mortgage rates have fallen to 6.85%, down from the high of 7.5% in April
  • New listings of homes for sale are up 7% year over year
  • The total number of homes for sale is near its highest level since late 2020
  • 60% of homes that were on the market in May have been listed for at least 30 days without going under contract, up 50% from 2022
  • 40% of homes have been on the market for at least two months without going under contract, up 28% from 2022

Our take
Now is a great time for serious homebuyers to get under contract on a house, especially when compared to earlier this year and all of last year. Mortgage rates are at their lowest level in more than four months, thanks to the latest inflation reports. Many sellers are having a hard time finding buyers due to the uptick in homes for sale and many listings going stale. This gives buyers a chance to get a good deal and negotiate for other concessions, like home repairs or help with closing costs. Our advice: tell your buyers to start taking action now before the Fed cuts rates in September and more people jump into the market.